Previously, users were limited to attachment sizes being cut off at 10 megabytes, but Harp said "with the new Hotmail we're going to up the ante by allowing you to send up to 10 gigabytes in a single message."

He told AFP that the way it works is by uploading documents or photos to Microsoft's SkyDrive, a free service that allows up to 25 gigabytes of online storage.

"The email recipient gets a link to SkyDrive and can view the photos or download the photos," Harp said. "Or if it's a link to a document, they can open up that document using the free Web-based version of Microsoft Office, view it and edit it."

He said files can now be sent as traditional attachments to an email if a Hotmail user prefers and the size limit has been increased from 10 megabytes to 25 megabytes, the same as Google's Gmail.

Microsoft is also adding instant messaging to its email service. "Right next to your inbox you can see your buddies, see if they're online, and send them instant messages," Harp told AFP.

Another feature that is designed to "help people stay in their inbox" is called "active views," which gives users the ability to view Web content in their inbox instead of using a separate Web browser window.

"Ninety percent of the mail that comes into Hotmail contains a link and these links ask you or require you to leave your inbox," Harp told AFP. "That's a lot of hopping out of your inbox.

"There's a space at the top of your email and you can interact with other websites without having to go to them," he said. "If you get photos sent to you from Flickr, you don't have to go to Flickr, you can see them right in your inbox.

"If you get a video from YouTube or Hulu you don't have to go to those websites, you can click and watch it right there in your inbox."

Harp said another new tool allows users to "cut through the clutter" by organizing messages according to the sender or subject.

"One click gets you to mail just from your contacts," he told AFP. "Another click gets you to mail from your social networks whether it's Facebook, MySpace or LinkedIn, all in one place."

Hotmail has added a new security feature that allows users to receive a single use password by SMS text message for use on a public computer. "If you're nervous about malware being on public computers you can use this one-time code," Harp said.

He added that Hotmail has made great strides in fighting spam. "In 2006, 35 percent of the average Hotmail inbox was spam," he said. "We've got that number down to four percent."

Hotmail currently receives eight billion messages a day with users sharing 1.5 billion photos per month and 350 million Office documents per month, according to Harper.

According to online tracking firm comScore, Hotmail had 359.9 million users as of March 2010. Yahoo! Mail was the next largest email provider with 283.6 million users, followed by Google's Gmail with 173 million users.